IN THE SUPERIOR COURT OF JUDICATURE
IN THE HIGH COURT (COMMERCIAL DIVISION)
KUMASI - A.D 2018
STEVE BRATHWAITE - (Plaintiff)
ATWIMA MPONUA RURAL BANK AND SAMUEL DADZIE & 4 ORS - (Defendant)
DATE: 24 TH APRIL, 2018
SUIT NO: BFS/36/17
JUDGES: ANGELINA MENSAH-HOMIAH (MRS.) JUSTICE OF THE HIGH COURT
JUDY EDUSEI FOR ASANTE KROBEA FOR APPLICANTS
ISAAC OWUSU ANSAH FOR BENJAMIN OSEI BOATENG FOR PLAINTIFF
KOFI BOYE ATENG FOR DEFENDANT
On 09/04/2018, the Applicants herein who described themselves as majority shareholders of the Defendant Bank field the instant application to be joined to the suit as Defendants. Under order 4 rule 5 (a) and (b) of the High Court (Civil Procedure) Rules 2004, C.I. 47.
The gravamen of this application, as gathered from paragraphs 7 and 8 of the supporting affidavit is that the Applicants who are majority shareholders will be significantly affected by the outcome of this suit. In arguing the motion, counsel for the Applicants conceded that the Applicants’ shares put together does not make them majority shareholders. Counsel for the Plaintiff/Respondent vehemently opposed the application. He argued inter alia, that the application itself is premised on the wrong footing, since the Applicant admit, through their counsel there, they are not majority shareholders. Counsel also submitted that the Defendant Company is a legal entity which can sue and be sued, and if a work is done to a company, he Company can sue in its own capacity.
Relying on Bank of West Africa, Appenteng, (1972) 1 GLR 153, counsel submitted that shareholders lack the capacity to sue or defend an action against a company. He urged the court to dismiss the instant application as being an abuse of the processes of the court and an invitation to open the floodgates to the remaining 95% shareholders to be joined as Defendants, which will in the long run unnecessarily delay proceedings. Concluding, counsel argued that, the Applicants as shareholders are not necessary parties to this suit. In the Bank of West Africa v. Appenteng case, referred to supra, the Court of Appeal held (holding 1)
“As a general rule, a shareholder cannot sue for a wrong done to a company or to recover money as damages to it, unless the action is taken by the Company itself…”
There are however exceptions to this general rule, for example, where the company purports to undertake an illegal or ultra varei activity, because section 217 (1) of the companies Act, 1963, Act 179, and where the individual members seek to protect their personal rights.
It is to be noted that the Applicants herein are not seeking to be joined as Plaintiffs, but as Defendants. The reliefs being sought by the Plaintiff, as a majority shareholder, are directed at the Defendant Company or bank itself.
These are the reliefs:A declaration of the court that it was wrongful for the Defendant not to include the business of un ordinary resolution proposed by the Plaintiff under section 185 of companies Act, 1963, Act 179, at its 32nd Annual General Meeting held on 24th, February, 2017.
(b)A declaration of the court that it was wrongful for the Defendant to issue shares above the authorized share issue of ten million shares of the Defendant without first complying with sec 22 at Act 179.
(c) Declaration of the court that all shares issued by the Defendant above the authorized shares are illegal.
(d) An order of the court compelling the Defendant to purchase back all illegally issued shares. Order 4 rule 5 (2) (b) of C.I. 47 provides that:
“At any stage of the proceedings, the court may on such terms as it thinks just either of its own motion or an application, order any person who ought to have been joined as a party or whose presence before the court is necessary to ensure that all matters in dispute in the proceedings are effectively and completely determined and adjudicated upon to be added as a party”
Considering the reliefs being sought by the Plaintiff, I do not see how the presence of individual shareholders will aid the court in the determination of the case. As rightly argued by counsel for the Plaintiff, the Defendant as a legal entity has the capacity to defend itself in respect of the acts purported to have been done by it. In the case of Sooboon Seo v. Gateway Worship Centre (2209) SCGLR 278 at 281, the court held, inter alia, that the church which is a company limited by guarantee is capable of handling its own litigation. If it is the case of the Applicant, that the acts complained of by the Plaintiff were done at the instance of the shareholders, the minutes of their meetings and the resolutions passed will reflect the same. As the Supreme Court held in Ackah v. Pergah Transport Limited (2010) SCGLR 728.
“Methods of producing evidence include the testimonies of the parties and material witnesses, admissible hearsay, documentary and other things (often described as real evidence) without which a party might not succeed to establish the requisite degree of credibility in the mind of the court”.
In the opinion of this court, the Defendant has in its possession or at its disposal all that it needs to defend the suit, without opening the flood gates to individual shareholders whose presence is not necessary for the determination of the instant suit. In short, the Defendant has the capacity and ability to defend itself. The refusal of this application will also not lead to multiplicity of suits as contended by the Applicants.
The Applicants are not necessary parties to this suit. The instant application lacks merit and the same is hereby refused. Cost of GHC 500.00 is awarded against all the Applicants in favour of the Plaintiff.
The substantive case is adjourned to 14th May, 2018 at 10.00am for hearing.